State of the State: Business, education leaders react to governor's proposals

Gov. Eliot Spitzer's ideas on reducing property taxes sparked the most debate Wednesday as various business interests gave their initial reactions to his State of the State speech.

But business groups said they were encouraged by other initatives, including the governor's plan to create a $1 billion fund to invest in upstate business development.

In the address, Spitzer proposed a bipartisan commission to recommend a "fair and effective" property tax cap. Spitzer said the state needs to tamp down school district property taxes, which make up two-thirds of the state's total property taxes.

The leader of the state chapter of the National Federation of Independent Business noted that more than 80 percent of its members back some type of property tax cap.

"New York's small-business owners face one of the highest and most onerous property tax burdens in the nation," said Mike Elmendorf, state director of the NFIB.

Elmendorf said he applauds the governor's call for a $1 billion upstate investment fund, but said the idea misses the underlying problems for the state's small businesses.

"The problem is not too little economic development spending; the problem is taxes and the cost of doing business," Elmendorf said. "Taxes, regulatory burdens, liability and energy costs are all far too high in New York and are killing opportunity, costing us jobs and driving people out of our state."

Spitzer's property tax suggestions didn't go over well with the New York State School Boards Association.

"Any solution to spiraling property taxes must address the root causes: soaring health insurance costs, pension obligations, the rising cost of energy, state and federal mandates, and laws the severely disadvantage school boards in the collective bargaining process," executive director Timothy Kremer said in a statement.

The president of a statewide teacher's union said the commission idea appears to address concerns among educators about the "unfunded mandates" in school districts and municipalities, such as pensions and retirement benefits.

Still, tax caps "have proven over and over again to be problematic in concept and disastrous in practice," said Richard Iannuzzi, head of New York State United Teachers. About 585,000 teachers and other school professionals belong to the union.

Many Republicans said Spitzer's property tax proposals didn't go far enough. Senate Republicans unveiled their own property tax reforms last week, which they said would save New York homeowners $6.6 billion this fiscal year, when coupled with existing tax relief programs.

"With all due respect to the governor, I believe this issue has already been 'commissioned to death,' " said Assembly Minority Leader James Tedisco (R-Schenectady). "We already know what the problem is. ... We can't allow a property tax cap to become bogged down in a commission."

More details on Spitzer's plan will likely be included in his proposed budget, which is due in two weeks.

Other education initiatives, such as a permanent endowment and a call to hire 2,000 new full-time faculty in the State University of New York system during the next five years, were less controversial.

"Rebuilding the ranks of our full-time faculty at SUNY and the City University of New York is absolutely critical to rebuilding New York's financial future," said Fred Floss, head of the union United University Professions, representing SUNY faculty.

Floss said the SUNY system needs 1,600 new full-time faculty to lower its student-teacher ratio to where it was 15 years ago. He called on Spitzer to include adequate funds in his budget.

SUNY's interim chancellor lauded Spitzer's ideas.

"The governor outlined the strongest recommendations for the State University of New York in generations," said John Clark, highlighting Spitzer's call for an endowment to support the SUNY and CUNY worth at least $4 billion.

Other issues, such as Spitzer's energy plan to invest in clean energy, were generally popular.

"We enthusiastically support the governor's call to add significantly more renewables to the electric generation fuel mix," said Patrick Curran, executive director of the Energy Association of New York.

Curran said he was pleased about Spitzer's plan to invest in clean energy.

"Energy should be reliable, plentiful and clean," Spitzer said. "So, going forward, we have put together a two-part program that reduces energy use on the one hand, and increases the production of home grown, renewable energy on the other."

He calls the plan "15 by 15," which is designed to reduce statewide electricity use by 15 percent from projected levels by 2015. Spitzer also called for a bill to fast-track the building of power plants to "get more supply into the grid."

Spitzer will submit a bill recreating the streamlined power plant siting process once provided by Article X provisions, which expired five years ago.

Arthur "Jerry" Kremer, who authored Article X while in the Assembly, praised that pledge.

"New York has enormous energy challenges and by pledging to reintroduce a fast track, Article X power plant siting law, Governor Spitzer is taking an important step that could benefit the state's economy by increasing the supply of affordable and reliable electricity," said Kremer, now chairman of the New York Affordable Reliable Electricity Alliance.

The Energy Association's Curran also expressed approval of an expedited siting proposal, but urged Spitzer to include "energy production technologies that can help combat global warming, including nuclear and clean coal."

A leading manufacturing alliance said it wants Spitzer to create a low-cost energy program for the state's business community, and eliminate the corporate franchise tax.

"Manufacturers and businesses alike pay some of the highest energy rates in the country," said Randy Wolken, head of the Manufacturers Association of Central New York. "Albany simply cannot ignore this problem."